Identifying Starbucks' Customers

Market Segmentation 

So, as I mentioned yesterday, today I’m going to ponder a bit on what would be the best target audience for Starbucks. In order to do so, I thought it would be useful to first segment the market into four different categories, as follows:

1) Teenagers are not Starbucks’ target group in general. Teenagers do not necessarily have the money and if they have, are not as willing to spend their money on a cup of coffee in a nice environment. Teenagers are  also not the kind of customers Starbucks is trying to reach. Even if teenagers are a large segment they do not fit in to the image that Starbucks is creating. In addition they are not high consumers of coffee products in Finland and Starbucks does not advertise to the youth in general.

2) Middle aged to senior citizens is also not a good target segment for Starbucks. First of all Starbucks does not usually concentrate on this segment and especially in Finland senior citizens tend to be very particular about what kind of coffee they drink and what they drink it out off. They prefer porcelain cups over paper cups for example. They are also more traditional coffee users and do not drink that much specialty coffees. Even though this segment is very broad it is not something that Starbucks is searching for.

3) Young urban adults are the segment that Starbucks usually concentrates on. According to Howard Schultz, Chairman of Starbucks, this segment is what the company refers to as its “core customers” –average age of 42, educated, and earning an average income of $90,000. (The New York Times, 2006). This segment mostly uses the kind of services Starbucks offers. Young urban adults are people of diverse income and age groups that have varying tastes and interests. Starbucks focuses on embracing diversity by providing good customer service and also by offering a large base of products that cater to different appeals. This group is also the most willing and interested in trying new products and innovations. By first reaching this target segment it would then be easier to persuade older age groups to try Starbucks’ products.

4) Tourists would be a segment that does not require a lot of resources to reach. Especially during the summer period, Finland has quite a lot of tourists in the capital area. Since the Starbucks brand is internationally recognised it would appeal to tourists.

 

Target Segment

So now that the market has been divided into four different segments, lets take a better look at the chosen target segment –young urban adults (approximately 18-45 year olds) coffee consumers in the capital area. This targeting would concentrate on consumers that value spending time in coffee stores that offer a relaxing and comfortable atmosphere. They are not only interested in grabbing a cup of coffee but also would like to enjoy the Starbucks experience. For this they would be willing to spend a little over the average price for specialty coffees. Therefore the target segment would mainly concern young adults that have regular incomes. Marketing should be focused on reaching youth customers with varying tastes and interests. Starbucks strives to provide excellent, tailored service and along with its large variety of products the comfortable atmosphere that Starbucks’ stores have, also offers young adults the chance to sit down and relax if they wish. The lifestyle of urban young adults is also typically fairly hectic, which suits Starbucks’ coffee-to-go culture.

So there you have it, a brief market segmentation of the customers of Starbucks. It's been snowing the whole morning outside, so nothing sounds as good as nice warm cup of coffee right now! Have a great day everyone :)

- Kosti (the coffee lover ;)    

Sources:

Dominus, S., 2006. The Starbucks Aesthetics. The New York Times, [online] Available at: http://www.nytimes.com/2006/10/22/arts/22domi.html?em&ex=1161748800&en=74b4f3e958fdeb7d&ei=5087%0A